Q. I am a small business owner and one of my employees is caught up in the flight chaos. What are my rights as an employer?
A. The advice from the Forum of Private Business is to be flexible with stranded staff but to know where to draw the line on unpaid leave. "The key thing is to keep in touch so you have the fullest information possible about your employees and their travel situation,” says Ross Meadows of Mace and Jones Solicitors and the Forum for Private Business' employment advisor. Meadows advises that if your employee's absence is likely to stretch for a protracted period then it should become unpaid leave unless your staff member wants to take extra holidays.
From a legal standpoint, employers do not have to pay wages for absent employees: "Employees have no general right to be paid if they don't come into work unless there are specific provisions in their contracts of employment," says Anne Pritam, partner specialising in employment law at law firm Stephenson Harwood.
However, employers must balance their legal obligations with the need to retain good people who are stuck abroad and who are vital for their business.
Q. Can companies or employees claim tax relief for expenses occurred during the travel disruption?
A. This is a grey area, says Jeremy Glover, partner at Stephenson Harwood. “It really depends on the circumstances. If an employee was on holiday and then got stuck and their employer paid for them to get home so that they could get back to work, this is most likely going to be treated like a payment in kind and so the employee is liable for tax. However, if the employee was on a business trip, then the company would be liable for any expenses.”
But companies who do claim tax relief should be ready for extra scrutiny from the HMRC. The default position of the HMRC, says Glover, is that unless an employee was away on business, any other expenses paid to get someone back to the office will be treated as a benefit in kind to the employee, who will then be liable to pay tax.
“Say you paid £5,000 to get a board member back to your office in time for a board meeting and then you want to claim it back as a business expense,” says Glover. “You should expect the HMRC to ask you questions such as whether you exhausted all other options; for example, could you have conducted the meeting using a teleconference, and was this expense really necessary.”
Q.I am a non-resident entrepreneur and I was delayed in the UK due to travel chaos. Am I now liable to pay taxes in the UK?
A.If you are not a UK resident then you are not allowed to be in the UK for longer than 90 days at a time. If you got stuck in the UK because your flight was grounded, then Jeremy Glover from law firm Stephenson and Harwood says it is imperative that you keep all of your flight details: “I expect HMRC will be reasonable as long as you have a plane ticket for a date that was within your time limit to stay in the UK. Also, once the flight restrictions were lifted you will need to prove that you left the UK as soon as possible.” Glover’s advice for non-residents caught up in the travel chaos is to contact their tax advisor as soon as possible.